Labour relations in America

Boeing bullied

Unions have the government in their corner

AFTER several disruptive and costly strikes in a part of the country where unions are strong, a company opens a new plant in a region where they are weak. The union complains to a government agency, which accuses the company of illegal “retaliation” against the union. It seeks to force the company to relocate its new plant back in the heavily unionised region. Is this France, or Venezuela? Neither; it is America.

The firm in question is Boeing, an aircraft maker. The strikes occurred in Washington state, where closed-shop rules mean that if a workforce opts to unionise, all employees must join the union as a condition of employment. The new plant that America's National Labour Relations Board (NLRB) saw as grounds to charge the firm with “retaliation” is in South Carolina, where “right-to-work” rules mean that no worker can be forced to join a union. The case has often been cited as evidence that President Barack Obama is hostile to business.

So businessfolk should have cheered when, on December 9th, the NLRB decided to drop its case against Boeing. But few did. For the NLRB's decision reflects a victory not for common sense, but for strong-arm tactics.

It seems that the NLRB, a legacy of President Franklin Roosevelt's New Deal, chose to drop the case only after it was asked to by representatives of the International Association of Machinists, the main Boeing union. The union told the government agency that it had just struck a lucrative deal with Boeing covering its workers in Washington state. With the deal done, the union no longer needed the government to hold a helpful gun to Boeing's head.

Boeing declared victory, but fooled no one. For this sets a precedent: the federal government's supposedly neutral representatives will threaten a company with serious harm if it doesn't make concessions to unions. That gives firms a powerful incentive never to set foot in union-friendly states in the first place. Many will doubtless build their factories abroad, where the NLRB's bureaucratic bruisers can't threaten them.